10 Things To Guarantee Ecommerce Business Success - Steps take to a bright future in business

Hey everyone, And my brands have done over $217 million in sales. Today, we've got a really exciting episode. I'm going to go through it. 10 mistakes that I've made when launching my e-commerce brands, things I wish I knew sooner. Let's jump into it. (techno music) Number one, one of the first things that I wish I did sooner was starting organic TikTok strategy. TikTok is here to stay. Videos are going viral and brands are making an absolute killing on the platform. Beauty itself grew to a hundred thousand followers really, really quickly. 

And we underappreciated how much impact the platform was actually having on our sale. The beauty of TikTok is that you don't actually need to spend on the platform to make lots of money, which is great for beginners. Creative, witty, and controversial videos, have the ability to go viral. I like to think of TikTok as a top off funnel strategy to gain awareness around your product. It's also an amazing platform for personal brands. Both my personal TikTok and The Oodie TikTok got to a hundred thousand followers really, really quickly.

 One of The Oodie videos got 9.9 million views organically. I'll hashtags the Oodiesquad, theoodie, I'd hashtag oodie, have over 225 million organic views. So you're probably asking, how do I get started on organic TikTok? The first one is you need to capitalize on a trend. There's plenty of trends out there on TikTok such as unboxing, reaction videos. You need to find the video that works for your product category. Use trending TikTok sounds. If they don't suit your video, you can turn it down to zero, it's a nice hack. Make sure you're asking questions in the captions of your TikTok videos to promote engagement. You need a high post frequency.

 You need to commit to the strategy, measure your views, and see if it's worth it. Make sure you keep things simple as well. You don't want to have to set up every single time that you want to shoot TikTok videos. A lot of brands, what they're doing, is they're actually making their hacking experience when they're sending orders to customers an actual TikTok video, this is seamless and works with our day to day. The best example of this is myglow2 and mermaidstraw. They've grown a huge following on TikTok. All they're doing is packing orders and communicating to their customers, reinforcing their community. 

The thing that I love about myglow2, is that they put a personality behind their brand as well. We've utilized a similar technique with the-oodie, you've probably seen it, the-oodie girl, Linda. Number two, they say ideas are cheap and execution is worth everything. And I totally agree with that. The second thing that I wish I did earlier in my e-commerce business, is differentiate through design. Let me take you through the journey of a typical e-commerce business. They have a great idea or see a great trend, and then they try to capitalize on that. They create the product and start selling. Advertising costs are great, because it's a new product. The advertising competition on Facebook, it's an auction, is low. We can easily get good CPAs, and then what happens, is other products start entering the market. They are either identical, or they're similar. They solve the problem in a similar way. 

What will happen, is then that will start competing in the Facebook option. Also shop as a savvy. What will happen, is that they'll go to Amazon, go to eBay, they'll get a cheaper version of your product. Suddenly you're not capitalizing on a whole market, you're only capitalizing on the people that understand your brand. This can really drive down your profitability. So if you have a differentiated product in some way, whether it's protected through design itself, such as The Oodie characters or it's protected through patents and trademarks, then you can maintain your margin and you won't get your margins squeezed over time. I think the first time that I realized this strategy, is when I started reading Porter's generic business strategies. 

Porter first set these out in 1985 in his book, "Competitive Advantage", creating and sustaining superior performance. There's lots of different strategies to make your business successful, such as cost advantage. Can you drive down operational costs to make your business more viable? The other is focus. Can you find a specific niche where you just know everything about your customers to make your business superior? Yeah, there's differentiation. We've talked about this, creating a unique product that is protectable through IP. - [Man] It's actually differentiation. - Differentiation, I can't even say it. You can say but I can't say it, that's not good (laughs). - [Man] Differentiation?

 - Differentiation, I can't even say that. Not the first word that I can't say, I couldn't say Palates for a long time. You're probably wondering how can I differentiate my products? Nailed it, there's lots of different ways. First, you can use a product designer. You can go into Upwork, you can use a product engineer if it's really complicated. They're gonna create 3D renders, which can then be turned into molds from your factory. One disclaimer, you need to make sure that you get IP agreements with everyone, including the consultant on Upwork and the factory in China.

 Don't let them steal your idea and run away with it. If it's completely novel and unique, you'll be able to file provisional patents on the product. If you don't have funding, you might want to use something like Kickstarter, but again, you really need to protect your IP, before you go into these platforms. The thing I really love about the textile industry, such as clothing, is that you can differentiate through just designs itself. Get a graphic designer to create amazing prints and put them on your blocks, which is like your T-shirt or your hoodie. If you wanna create a completely unique block, you're gonna need a fashion designer as well. 

The last piece of advice about this, is don't get obsessed with your idea. It just might not work. Try to keep your design process as lean as possible, and then validate the idea through Facebook or other digital advertising. Oh, it's hot under this. Number three, the third thing I wished that I did earlier, is use post-purchase attribution surveys. It may sound complicated, but it's really not. Basically, we're just trying to get information from our customer post-purchase. There's a ton of ways that we can do that. We can use a tool like hotjar or Enquire and actually put it on the confirmation page, after the customer orders on Shopify. we can also use Klaviyo and hotjar, and we can put it in the post-purchase flow that the customer gets to ask them how their experience was. 

One of the main questions that we want to be asking here, is where did you see us? You wanna understand, did the customer see you on TikTok? Did the customer see you on Facebook? Some other places they might've seen you includes friends and family, Instagram, Google. This is an amazing opportunity as well, to ask plenty of questions about your product and service. Why didn't they buy? What competitors did they consider before they purchased? Use all of this in your marketing. The reason why I like post-purchase channel attribution surveys, as in trying to understand where the customer is seeing you, is you can use that to optimize your ad spend. The reason why I like to find out the channels where my customer has seen me, is because all of these paying platforms, such as Snapchat, Pinterest, Facebook, they all want to claim that sale. 

They're saying I caused this sale, so you will spend more on their platform. This isn't true. You might find that customers barely remember seeing people on Snapchat. That's not to say that they haven't, but it's actually not their main place that they remember you. This can help you optimize your ad spend and possibly even stop working on those platforms. One other thing that I'm really loving at the moment is a post-use survey. This is a survey that you send 14 days after the product has been delivered, so that they actually have time to use the product. I find that these insights are amazing. People are telling us about our products and how we can improve our customer satisfaction. 

At the end of the day, we're just trying to provide the best products and service for our customer, so listening to them is very important. If you have a product with a really high friends and family referral rate, it could mean that you're onto a really strong product. Referrals are one of the best ways to make your ad spend go further. When you acquire a customer on Facebook, they might tell another 0.2, 0.3 customers on average, this is gonna make you spend far more efficient and your business grow way quicker. Number four, four. Number four, one thing I under appreciated when I started the business is the importance of operations. 

Anyone that knows The Oodie well, knows that we're sold out a lot of the times. To be completely honest, we definitely could have handled our supply chain better in the early years, this all comes down to a strong operations team. Operations can get complex really quickly with a complicated business, especially global distribution. If you're a clothing range, I really suggest that you get a merchandise planner as quickly as possible. A supply chain manager, possibly even a fulfillment manager to manage your three PLs accordingly. There's a large amount of accountability that you need, especially with your suppliers and even your three PL providers. Are they providing you the orders that you've ordered in a timely manner? And are your 3 PLs charging you accordingly every single month? Investing in your operations team, is often a very good option if you are a growing business, because then you can compare freight rates and get better deals everywhere. 

If you think about it, when you run out of inventory, you lose a ton of money. And more importantly, you lose a ton of momentum, including your ad accounts and everything. By having a dedicated resource, looking at the demand of the business on a weekly basis, and then matching that to the supply, what's coming in is really important. This can be in the form of weekly trade meetings, supply meetings, all of those kinds of things, just constantly reviewing it, connecting both marketing and operations. If you're a very small business, there's actually a cool app called inventory planner that I've used for a very long time. It's quite robust and quite simple. One thing I wish I did sooner in terms of operations, is set up an ERP to really manage our purchase orders and our accounting.

 I strongly recommend it, if you're starting to grow over $25 million in revenue. Number five, another thing I wish I did earlier was build dashboards around key performance indicators. What do we want to measure? You should also build these dashboards around sales, channel spent and net profit. Clear dashboards, give visibility throughout the month for your entire team. There are many techniques to build these dashboards. You can use an out of the box software like BeProfit or Triple Whale. What we do and what I prefer, is using Klipfolio or Google Data Studio, and basically having a VA populate sheets in Google sheets. And then these dashboards pull this information in a consumable way for my team. One tip I do have, if you're only just getting Strapevise set up, is make sure you set up your Shopify cost per item in the most accurate way possible. 

I like to have the cost of goods, the freight cost and the courier costs, trying to get the whole picture in there. So that when you break down your net profit in these dashboards, they're really accurate. All you need to do is deduct the marketing spent and then you get an approximate net profit, obviously excluding all your operational costs and your staff. We've also just set up a really strong customer service dashboard, measuring customer satisfaction, negative reviews, agent response time. It's been very, very effective at tracking efficiency and allowing us to make optimizations in our process and our product. Number six, once you have your dashboards and forms of measurability, you're able to set up an OKR system. 

OKRs was set up by John Doerr in 1975, a salesperson for Intel. Since then tons of tech brands use them. And we absolutely loved them. After reading "Measure What Matters", we decided to roll out OKRs throughout the company in all departments, and it was a game changer. Google stands by OKRs, so why shouldn't you? OKRs stand for objectives and key results. It's similar to a KPI system, but more objective oriented. Higher level objective, such as increased revenue is a goal that you set every quarter or half yearly. Then you'll put a series of key results under the objective throughout the company. This creates alignment. So for example, if it is increased revenue, what can customer service do in terms of measurable key results to achieve that objective? 

It might be increase efficiency in terms of agent response time, then marketing will have a similar objective, but their key results will be completely different. For example, it might be increased AOV by 10% for this product. Key results need to be a hundred percent measurable. One of the best things about rolling out this system, was we realized we were looking at the wrong data, or we couldn't even measure the right data. Build systems and procedures, so you can measure what matters. Number seven, almost there. Before I keep going, make sure you subscribe and show us some love. One common mistake that I see brands making, is not hiring a CRO team very, very early on or optimizing their funnel. This is a key lever in making your ad spend go further and your brand grow quicker. CRO stands for conversion rate optimization.

 If you're a strong marketer, you're probably already optimizing your funnel such as click funnels or something like that. But if you're not a strong marketer and you're just a product owner, then you're probably gonna need to hire a CRO expert or possibly an agency. We've had split tests that run, that increase our conversion rate by over 40% an incredible improvement that has grown our business very quickly. The series of split test that I like to run, is the product page, then the cart page, then you can split test elements on my homepage. Shopify makes this quite difficult, but they are rolling out new technology that can help this. If getting started and you're on Shopify, I like to split test the product page first. You can use tools like Google Optimize, convert.com, there's a ton of A/B split testing tools out there. Programs like click funnels and webflow make this a lot more seamless than Shopify.

 However, I do know Shopify are working on some really cool stuff. One thing that is often overlooked in terms of split testing, is A/B price split testing. You can use an app like Dexter to split test your pricing and look at the revenue per visitor. Pricing is often a lever that nobody poles, and it can increase your profitability more than anything else. People are often hesitant around running price split testing, because they're worried about the customer perception on that test. The truth, is people just don't notice and it's a completely accepted practice. If you're a low margin brand that has not done split testing, I promise you, this is the most important thing that you could do next week. Number eight, you need to understand your financials if you want amazing e-commerce success. It may not be as sexy as product design, but it is most definitely still as important.

 When you're a new founder, chances are you probably don't have the supporting structures such as accountants and all of that kind of stuff looking over your books. One mistake that I made with one of my brands, is I didn't know my finances down to the absolute dollar. I wasn't including proper taxes in certain regions, such as GST in Australia, and my margin was much smaller than I thought it was. We didn't hire a really good accountant from day one, which basically showed us that our brand was more profitable than it was losing us a lot of money. Other factors came into play, such as we weren't tracking freight costs and courier costs down to the absolute dollar. If we knew sooner, we could have adjusted our rise at targets, adjusted our pricing, and made a much healthier brand. 

If you are starting to get some success, make sure you hire a proper accountant, maybe someone that's worked in e-commerce already. The other thing that you can do, is just do some online finance courses, become literate in finance, start learning how to read the profit and loss statement, cashflow reports and balance sheet. Profit and loss is going to give you your profitability month by month. If your accountant is not producing your cashflow reports, then chances are they're either being lazy or they don't know how to do it. You need to make sure that you have enough money when the tax man comes asking for his bill. Here's some questions that are challenge you to understand. What is your 90 day lifetime value of a customer? 

As in how much do they spend over 90 days? What is your profit on those 90 days? What region is the most profitable region that you have for your business, such as country or state? how much cash will you have in one month, six month and 12 months based on your sales forecasts? Number nine, this point is out there for all those dropshippers out there that are too scared to take on a big project. One thing that has made us so successful, is our willingness to take on larger product items. Freight and couriers is such a large cost in e-commerce. This is why that larger product items aren't actually viable for dropshippers. It serves as a mode of protection around these scammy drop shipping stores that are basically going to steal all your content and launch the exact same product as you, shipping directly from China to customers. 

These products are often higher AOV, and we can create more margin with them as well, which also serves as a nice protection around Facebook changes such as the cost of acquisition costs rising. There's nothing to be afraid of shipping containers in working closely with a three PL and providing an amazing branded experience for your customer. Number 10, the last thing I wish I knew sooner, is that product timing is everything. This serves very well into the differentiation (laughs). This serves well into the point we had before that, making your product unique. With Facebook, it really serves novel new products because it's exciting and people engage with it. If you're launching a product that is saturated or old, Facebook might not like putting it in its feed as much. When looking for trends, look for something as fresh as possible. It might even be region specific. 

You might just need to bring that product to that new region. The best example of this is probably the fidget spinner. If you tried to sell fidget spinners on Facebook right now, you'd be in real trouble. However, if you're one of the first people to launch that product on Facebook, you would've made absolute millions. And I know that they did. By that time it was an absolute art, and if you can figure it out at scale, you'll have a billion dollar company in no time. I hope you enjoyed today's episode. I know I've made a million mistakes in my business. These are 10 things that I wish I knew sooner. Make sure you like and subscribe. Thanks for joining me.